Botswana: Living There - Tax Issues
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Living There
Resident individuals are taxed the same as non-residents on the source of their income. The same deductions as those for non-residents apply to residents. However, residents are subject to different tax rates.
The following tax rates are levied on the net income of resident individuals as of July 1, 2006:
INCOME TAX |
|
| TAXABLE INCOME, BWP (US$) | MARGINAL TAX RATE |
| Up to 30,000 (US$4,845) | nil |
| 30,001 – 60,000 (US$9,690) | 5% on band over US$4,845 |
| 60,001 – 90,000 (US$14,535) | 12.5% on band over US$9,690 |
| 90,001 – 120,000 (US$19,380) | 18.75% on band over US$14,535 |
| Over 120, 000 (US$19,380) | 25% on all income over US$19,380 |
| Source: Global Property Guide | |
A withholding tax of 10% is levied on the rental income of residents.
Contributions made to an approved pension or retirement fund are deductible up to 15% of taxable income (exclusive of earnings from investment and capital gains).
Capital Gains Tax
Residents are exempted from capital gains tax when they sell their principal private residence. However, the proceeds from the sale must be reinvested in another residential property within 24 months. In failure to do so, the exemption will apply only once in the life time of the taxpayer.
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